Secondary menu

You are here

Fear and trembling

The call comes in to the HME provider hotline at 10 p.m. - it's Mrs. Jones, a new Medicare oxygen patient and she has an emergency. Please come right away!

Because the provider promised Mrs. Jones' physician that she would get the highest level of service, the company RT jumps into the delivery van and speeds to her house 20 miles away in a valiant effort to help the elderly widow with her oxygen equipment.

But once the therapist gets there, she finds out that Mrs. Jones' "emergency" is that her poodle Fifi needs to go for a walk. So two hours of RT overtime pay and several gallons of gas are wasted on a pet-sitting exercise. "As ridiculous as that sounds, it happens all the time," says Millville, N. J.-based consultant Terri Maggio. "No one is paying you do to that. Yet quite a few providers have the attitude that it's just a part of doing business and that their job is to provide services that aren't paid for."

Other professionals seem to have some sort of recourse, whether it be through an attorney's "billable hours" or a physician's ICD-9 codes. But millions of dollars escape from HME provider coffers each year in the form of waived co-payments, non-reimbursed services and uncollected fees. And while it's true that home medical equipment supply is ensnared in a web of external regulatory forces, the blame for these cost-intensive activities usually falls squarely on the shoulders of the providers themselves, experts say.

Back in the days before the Balanced Budget Act of 1997 lacerated oxygen reimbursement, it was common for providers to offer "value-added" services to patients. Now however, those extra services come at a steep price and providers like Waukesha, Wis.-based Oxygen One feel like they've set a precedent that can't be undone.

"Once a service is provided, it becomes expected and it doesn't look good if you try to remove it," said Oxygen One sales rep Rene Cranston. "[As an industry] we're stuck because physicians want the best clinical care for their patients even though we've had to endure the cuts. It has definitely created a dilemma."

While there are many reasons why money eludes the provider's grasp, industry observers chalk much of it up to a cultural flaw within in the industry - reluctance to pursue what is rightfully theirs.

"It's a disease I call 'aversion to collections,'" Maggio said. "Hospitals will go after your first born while HME providers do next to nothing. It causes them to cut each others' throats with service and it costs so much money you can't possibly be profitable."

Atlanta-based consultant Jane Bunch agrees, saying that the predominant mentality in HME is that it's better to lose revenue than alienate a referral source.

"They don't aggressively collect the Medicare 20% co-payments like they should," said Bunch, president of JB & C Consulting. "So when physicians tell patients that a piece of home medical equipment is free, providers forego collecting it rather than risking making the doctor mad."

This lack of nerve only exacerbates a problem caused by a lack of Medicare policy education in the clinical community - specifically physicians, nurses, discharge planners and other referral sources, Bunch and Maggio said. By taking some initiative and explaining Medicare payment structures to these clinicians, providers can help prevent these awkward situations from occurring in the first place.

"I take black-and-white handouts to physicians, nurses and paperwork people and let them know that this stuff isn't free," said Bunch, whose father operates a chain of seven HME stores in Georgia. "Most of the time they don't even realize it."

Maggio, president of Maggio Enterprises and executive director of the Jersey Association for Medical Equipment Services, recommends using an educational technique she calls the Five Ps, which means that physicians, providers, patients and payers are all partners.

"It is the unwritten responsibility for the provider to educate everyone," she said. "The payers don't know what they're paying for, the patient doesn't know what's covered, and the physician just orders it without caring about the rest of it."

As for those who worry about making a physician mad, Bunch counters with this assertion: "If you're not getting paid, what does it matter whether a physician uses you or not? The referrals will bankrupt you anyway."
Relying on docs 'trouble'

Another area where clinicians' lack of Medicare knowledge causes lost revenues is with certificates of medical necessity Â­ especially when lab testing is required, noted Angelo Oliva, CEO of Pulmocare of Northern California.

"Anytime you've got a physician involved with completing paperwork in a timely manner, you're in trouble," he said. "We've been trying to educate our physicians about CMNs and they can't comprehend why [CMS] is such a stickler about them. If the physicians responded to the CMN the same way we respond to the patient, cash flow wouldn't even be an issue."

Although providers are prohibited from "coaching" doctors on filling out CMNs, they can hold inservices on Medicare guidelines and demonstrate the proper way to complete a CMN. And while Oliva says the instruction typically "goes in one ear and out the other," the delays would be much worse without the inservices, he said.

The real A/R killer for Vacaville-based Pulmocare is when an order relies on lab testing data, he said.

"There are only two labs serving an area of 10 million people and it's killing us," Oliva said. "We do what we can to expedite the process from our end, but then the lab has to fax the order to the physician, who then takes a week to get back to the lab. From there the clock really starts ticking."

The solution, he said, is for Medicare to give the labs some incentive to complete the data in a timely manner.

'Transparent' services

It's no secret that home medical equipment services are fraught with complexities that other businesses don't have to face. Even so, these contingencies need to be built into the provider's business plan, experts say.

"I call them transparent services," Maggio said. "Because HME providers are the conduit of information for everyone else in the health care chain, there is a lot of detective work they do that isn't paid for. So providers need to identify these steps and make sure that everyone in the organization is aware of them."

Product delivery is one of the transparent services, Maggio says, because it consists of more than just dropping off a piece of equipment.

"It's not like furniture delivery," she said. "It's giving instructions and providing on-call services. They field a lot of questions. Patients are going to call the provider because it's the only connection they have."

As a result, this connection commonly serves as a pipeline for dollars to flow out of the business, as providers are prone to jumping at the patient's every beck and call. Of course there are real emergencies that necessitate provider visits, but there are many costly false alarms that occur due solely to a patient's insecurities. It is these expensive superfluous calls that providers must guard against, Maggio said.

Stuck with giveaways

Carolyn Kirk, owner of Elgin, Ill.-based Total Home Health, admits that her company has endured more than its share of money-consuming mishaps. Typically these errors are the result of some sort of misunderstanding regarding coverage.

"There are instances where we have accepted Medicare assignment, made deliveries, didn't get paid and got stuck with giving things away," she said.

For instance, Total has accepted assignment for capped rental Medicare patients only to find out that these patients were only two months away from capping out.

"Obviously we need to do a better job at the intake phase, but there's no foolproof way of preventing this from happening," Kirk said. "We try to determine if these patients have been through the system before, but sometimes they just don't tell you Â­ then you get stuck."

To avoid this situation in the future, Kirk said her company is becoming much more selective in accepting assignment for capped rentals. In addition, they are working to ensure that the lines of communication are clear between office, warehouse and delivery personnel in order to prevent accidental deliveries.

"It's much easier to correct mistakes at our end because once the product makes it into the patient's home, you've lost control of it," she said.

Indeed, bad intake causes a lot of problems, Bunch maintains. If billing departments were just a tad more thorough at the outset, it would prevent a lot of hassles down the line, she said.

"Insurance verification is a rudimentary process, but so many providers do a poor job at it," Bunch said. "Hospitals don't have that problem because even if a maternity patient is in the ER dilated to eight, they get that insurance info."

Getting verification can be as simple as calling the insurance company and speaking with the HMO agent or case manager, Bunch said. Yet even that step is commonly overlooked, she said.

"If providers spent just a little more time with the payers it would help tremendously," she said.

Balancing care & cost

Oxygen One owner Jill Spellman acknowledges that respiratory care is a labor- and cost-intensive business - especially providing liquid oxygen, which is the company's main thrust.

"Much of what we do isn't reimbursed," she said. "Among them is sending an RT for clinical assessments after a patient has been set up. Many companies no longer do that."

And while it may be in the company's best financial interest to cut back on services, Spellman says she isn't willing to compromise.

"Financially we're doing well - we could be doing better if we got rid of liquid because we could cut the number of visits in half," she said. "But we believe it's to our benefit in the long run to continue providing liquid."

As it stands now, reimbursement cuts aren't going to change Oxygen One's heavy clinical emphasis - if anything, the company is trumpeting that fact even louder. The result, Cranston notes, has been an increase in referrals.

"As someone in sales, I am using that to market the company," he said. "Our clinical follow-up results in better patient efficacies, keeping them out of the hospital."

"We are more people-oriented than machine-oriented," said Suellen Champion, vice president of respiratory services. "And I know that we don't get paid for a lot of non-revenue-generating services, but they actually are revenue-generating. Word gets around and people call us asking to do the same thing for them."

Have patients see you

One way Phoenix-based Western Medical has preserved expenses is by getting patients to stop by the office.

The purpose is to fit sleep apnea patients with CPAP masks to check whether the prescribed model is the best match for the patient. Ostensibly the reason for the office visit is to utilize the store's testing equipment, which includes a special table and mat for the patient to lie down on and simulate sleep. But it also saves the company a bundle in transportation costs, says account executive Tom Cohrs.

"We probably did about 80% of these set-ups in the patient's home, but now it's only about 20%," he said. "It has generated substantial cost savings for us."

The office visits also help maximize time spent with patients, Cohrs says, because "we can control the time whereas when we're in patients' homes, they control the time."

Not all patients will be able to make it in to the office though, and those patients tend to be more costly, Cohrs said.

"For some reason those patients who don't come in need us at their homes more often," he said.

'Work those denials'

Jane Bunch routinely holds workshops that instruct providers on how to hold on to more of their cash, and she says she's always amazed at how many attendees get tripped up on billing technicalities.

"One thing I always ask is how they handle the process of denials," she said. "In one recent session there were 74 people and not one of them knew how to do it right."

So Bunch shows providers how to "work those denials" so that the claims get paid. A denial code usually lists a CO35 number on the left-hand side of the explanation of benefits under the patient's name, she says. If there is an M3 listing, it means that the claim was denied due to the patient having "same or similar" equipment. An M6 means that the item was capped out and that the claim won't be paid.

"Unless you have that information, you won't be able to work the denial because you won't know what steps to take to send it in for review," she said.

Terri Maggio adds that payers usually wear down providers on denials by demanding a complex set of examples that take too much time and effort to produce.

"That's where they've got us," she said. " It's a divide and conquer mentality. We usually don't come up with information necessary to fight, so we bite the bullet and write it off. Then we learn from experience how not to do it in the future." HME